Riding a dynamic wave of change in air travel
The growing popularity of air travel has transformed once sleepy airport terminals into bustling retail hubs. This year, Airport Retail Enterprises (ARE), celebrates its 40th birthday. ARE is the only fully Australian owned company of its kind whose history spans this remarkable period.
ARE has been at the vanguard of change in airport retailing – the first company to bring roasted and ground coffee and freshly cooked meals to Australian airports, and the first to develop its own airport-specific retail food brands.
“This is an industry that really keeps you on your toes,” said ARE owner Peter Butts.
“You don’t own your spot in the terminal and we never forget that.
“In an airport you’re serving customers who may be tired, stressed, late or on tight schedules. You are also dealing with the high expectations of both customers and landlords. We have to keep a lot of people happy over the term of our leases so that we retain and grow our business. Our success can be attributed to the dedication of our staff. From the boss to the baristas, from the CEO to the counter-hands, all our employees work as if ARE was their own business.”
When ARE began trading in 1971, it was a fledgling Perth-based enterprise and Peter Butts owned a 20 per cent share.
“Airports were vastly different then,” Mr Butts said. “Terminals would have a duty-free shop, a newsagency, a bar and maybe a souvenir shop if you were lucky – that was it.”
The new start-up was quick to grow and within three years the company had expanded into Melbourne, opening three newsagency/bookstalls at Tullamarine.
The venture made ARE the largest bookseller in Victoria at the time.
By 1985, ARE had expanded again – this time to Brisbane, where the company operated the airport’s concessions area out of a converted WWII hangar.
Annual sales in the new area steadily rose from $1.3 million in 1986 to $6 million by 1990.
The company’s Brisbane presence grew further in 1987, when ARE secured all food and beverage operations at the new Brisbane Domestic Terminal.
The pilot strikes of the late 1980s caused nervousness among investors and Mr Butts took the opportunity to increase his share in ARE. By the 1990s, he owned the company outright.
Tony Vereker, ARE’s long term lawyer, said that foresight had always been a hallmark of ARE’s approach to business.
“As long as I have worked with ARE, the company’s management has taken the long view,” he said.
“Peter has a real knack for keeping a lot of balls in the air and knowing how long you need to hold them there to make something happen.”
During the 1990s, as ARE expanded into Cairns, Alice Springs and Darwin, a shift occurred across the airport retailing industry.
Airports overseas had begun developing a wider range of products for growing numbers of travellers.
“We realised we had to keep up,” Mr Butts said. “Internationally, standards were really improving and there was a lot more on offer, we wanted to be part of it.”
In 1998 the company took a major step that would help define it for years to come. ARE developed the first food and beverage brands to operate exclusively in a food court environment on Australian airports.
The brands ARE developed included Velocity, Refuel, Pure NRG and Tanja’s.
“It was in many ways, ARE’s proudest moment,” Mr Butts said.
“It opened up what airport food outlets could be and really shaped us as a company.
“We were extremely fortunate to have support from QANTAS, which allowed us to grow and take these kinds of risks.”
The success of the brands in Brisbane led ARE to bring Velocity and Pure NRG to Sydney in 1999, ahead of the 2000 Olympic games.
With its presence in Sydney growing, the company chose the harbour city as the site for further innovation, opening Wok On Air and Ignite Grill in 2003.
These outlets offered freshly cooked food – a first for an Australian airport.
“It was a bit of a punt early on,” Mr Butts said.
“We knew that people wouldn’t want to wait all that long for a meal, but we thought if we could do something that was fresh but still quick, then people would support it.”
Three years later, ARE joined forces with landmark Sydney café Bar Coluzzi to open a franchise at Sydney International Airport, delivering the tastes of the city to the airport.
In 2010, the company took this idea a step further announcing partnerships with two Melbourne food identities - Shannon Bennett and Frank Camorra.
The new ventures would lead the two chefs to open spin-offs of their award-winning restaurants at Melbourne’s Tullamarine Airport.